A yearslong saga over the future of TikTok in America is nearing its end. The U.S. division of the popular social media app, which is owned by Chinese tech giant ByteDance, will soon be majority-owned by a coalition of U.S. investors that includes Oracle.
The agreement was detailed in an internal memo from TikTok CEO Shou Chew, first reported by Axios. Oracle, alongside private equity firm Silver Lake and the Abu Dhabi-based investment firm MGX, will own 45 percent of TikTok’s U.S. operations. ByteDance will retain a stake just below 20 percent, and affiliates of existing ByteDance investors will own the remaining roughly one-third.
MGX did not respond to requests for comment from Observer. Oracle and Silver Lake declined to comment.
The development follows years of concern over ByteDance’s access to data on U.S. citizens, an estimated 170 million of whom use TikTok. Efforts to either ban the app in the U.S. or force a sale to American owners began last year under the Biden administration, with deadlines later extended multiple times by President Donald Trump.
The terms of TikTok’s new deal appear to closely mirror a framework laid out by the White House in September to place the company’s U.S. division in domestic hands. Under that proposal, Oracle would be responsible for recreating TikTok’s algorithm by retraining a new version for the U.S. market and protecting American user data in a secure cloud. At the time, Trump said Chinese President Xi Jinping had expressed approval of the plans.
Oracle will play a similar role in TikTok’s new agreement, which is expected to close on Jan. 22. The American owners of the division will oversee “retraining the content commendation algorithm on U.S. user data to ensure the content feed is freed from outside manipulation,” according to the Chew’s memo, which also notes that Oracle will serve as a “trusted security partner” upon the deal’s completion.
Austin-based Oracle, co-founded by billionaire Larry Ellison, has emerged as the winner among a crowded group of U.S. players—including MrBeast and Perplexity AI—bidding for ownership of TikTok. The deal is set to further deepen ties between TikTok and the tech company, which already helps the platform store U.S. user data. Oracle’s shares are up by more than 7 percent today (Dec. 19).
The new deal is expected to value TikTok at approximately $14 billion, according to Axios. After it closes, TikTok’s U.S. operations “will operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation and software assurance,” the memo said, while “TikTok global’s U.S. entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising and marketing.” The U.S. venture will be governed by a seven-member, majority-American board.
The agreement, which is still pending approval from Chinese regulators, would resolve a longstanding point of contention between Washington and Beijing. Not all lawmakers, however, are convinced that it goes far enough to safeguard national security or protect the data of U.S. citizens.
“This deal won’t do a thing to protect the privacy of American users,” said Senator Rob Wyden, a Democrat from Oregon, in a statement.”It’s unclear that it will even put TikTok’s algorithm in safer hands.”
